Document background
A Collateral Release Letter is a crucial document used in Saudi Arabian secured financing transactions when a borrower or security provider has satisfied their secured obligations and is entitled to the release of their collateral. This document type is particularly important in the Saudi Arabian context as it must comply with both the Commercial Pledge Law and Shariah principles governing security interests (Rahn). The letter formally evidences the discharge of the security, confirms the fulfillment of the secured obligations, and authorizes the release of any registered security interests. It should be used when all or part of the secured obligations have been satisfied and the relevant collateral needs to be released. The document typically includes details of the original security arrangement, specific description of the collateral being released, and necessary authorizations for deregistration with relevant authorities.
